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ACTA: Through the loopholes of EU law

Posted on21 January 201010 February 2010

Next week, negotiating countries will meet for another round of talks on the infamous ACTA, which among other things aims at tackling the unauthorized sharing of cultural works over the Internet. In the past days, members of the European Commission sought to soothe parlementarians, public-interest groups and citizens by saying that the agreement would not go further than existing EU law.

Neelie Kroes, soon-to-be Commissioner for the Digital Agenda, commented the ACTA negotiations during her confirmation hearing on January 14th, saying that there will be no “harmonization by the back door“. She also seemed to rule out any further harmonization of Intellectual Property Rights” (IPR) enforcement in Europe, and told reporters after the hearing that the “mere conduit” principle1Mere conduit is guaranteed by article 12 of the 2002 e-Commerce directive. This principle sets a special liability regime for network operators by which they have no legal liability for the data transmitted via their networks – a principle essential to Net neutrality and guaranteed by the e-Commerce directive – will be maintained.

But, as recent developements make clear, ACTA could severely impact Net neutrality and other founding principles of the Internet that ensure the proper exercise of fundamental rights and freedoms on the Internet, even without any change to EU law.

Telecoms Package: A “convenient” circumvention of users’ rights

In November 2009, the Council of the EU and the Parliament agreed on a compromise to replace amendment 138, which was adopted twice by an 88% majority of the Parliament. Amendment 138 was a very clear and groundbreaking statement on the part of the representatives of European citizens that on the Internet too, fundamental rights and freedoms apply. It read that “no restriction may be imposed on the fundamental rights and freedoms of [Internet] end-users, without a prior ruling by the judicial authorities“. The scope of amendement 138 was sufficiently broad to cover all kinds of infringements on people’s access to a free and open Internet.

However, some Member States – France and the United Kingdom especially – did not want the full protection granted by amendment 138 and therefore forced the Parliament to drop it. At the time, many Members of the Parliament led by Catherine Trautmann presented the substitute for amendment 138 as a sufficient protection, while public-interest groups bemoaned that the scope of the compromise was substantially narrower than the general principle proclaimed by amendment 138. More specifically, the compromise only offers Internet users protection against “measures taken by Member states” when amendment 138 applied to “any restriction”. It thus allows for the implementation of anti-Net neutrality practices by Internet Service Providers (ISPs) and other restrictions imposed by private parties. Moreover, the reference to the judicial authorities, which are normally the sole guarantors of fundamental freedoms in countries respecting the rule of Law, was deleted.

The EU Commission has called for “voluntary agreements” between ISPs and rights holders

The change from amendment 138 to a subtitute has opened the way for “self regulation” strategy aimed at tackling filesharing. Just weeks before the final adoption of the Telecoms Package, in September 2009, the Commission released a communication on the enforcement of IPR. In the communication, the Commission’s Internal Market Directorate General wrote that:

The focus on common interests should allow voluntary arrangements to be fostered between stakeholders and thus practical solutions to be found. Voluntary arrangements to combat counterfeiting and piracy2As made clear here, many policy-makers’ approach to filesharing is characterized by a dangerous confusion between counterfeiting and piracy on the ground can give stakeholders the flexibility to adapt quickly to new technological developments. Moreover, this approach empowers stakeholders themselves to work out optimal measures, particularly technological solutions. Voluntary agreements can also be more easily extended beyond the European Union and become a foundation for best practice in the fight against counterfeiting and piracy at global level.

In the past months, there has been a strong opposition between ISPs and rights holders, the latter wanting to transfer to the former some of the costs associated with the repression of file-sharing. Although it needs not be that way, rights holders feel like by altering the very openness of the communicational architecture, i.e putting an end to Net neutrality by implementing filtering practices aimed at preventing unauthorized transmissions of copyrighted works over the network, is the only efficient way to deter file-sharing.

The European Commission’ Internal Market Directorate General has been responsive to the cries of entertainment industries. In the weeks leading up to the release of the communication on IPR enforcement (released early-September 2009), a set of meetings took place between industry representatives in order to consider the specifics of voluntary agreements. ISPs were compelled to join in under the threat of legislation3Such a threat is still pending: the communication refers to legislation by warning that “the Commission will carefully monitor the development and functioning of voluntary arrangements and remains ready to consider alternative approaches, if needed in the future” (p. 10)..

ACTA: Ending “mere conduit” through self regulation

Fostering “voluntary agreements” between ISPs and rights holders is exactly what ACTA does. Although this multilateral agreement deals with a wide variety of issues concerning the civil and criminal enforcement of IPR, a whole chapter is dedicated to the Internet. In November 2009, the US proposal for this chapter was discussed between negotiating countries. A summary of the proposal by the EU Commission was sent to Member States and leaked. It confirmed the fears of many civil rights avocates. According to the document, the proposal provides that:

To benefit from safe-harbours4“Safe-harbours” refer to the “mere conduit” principle., ISPs need to put in place policies to deter unauthorised storage and transmission of IP infringing content (ex: clauses in customers’ contracts allowing, inter alia, a graduated response). From what we understood, the US will not propose that authorities need to create such systems. Instead they require some self-regulation by ISPs.

Hence, it now appears that the substitute to amendment 138, by refusing to grant Internet users protection against potential malpractices on the part of ISPs, created an important loophole that is being exploited through undemocratic channels.

What to do?

Despite the reassuring words of Commissioners Reding and Commissioner Kroes during their respective hearings, the Commission and Member States need to come clean on this fundamental issue.

As requested by a worldwide coalition of civil society groups in an open letter, they need to establish transparency in the negotiation process and refuse any proposal that would undermine citizens’ rights and freedoms. In particular, consistent with the resolution voted in 2008 by the European Parliament, non-commercial copyright infringement should be excluded from the negotiations5 According to the Parliament: “the Commission should take into account certain strong criticism of ACTA in its ongoing negotiations, namely that it could allow trademark and copyright holders to intrude on the privacy of alleged infringers without due legal process, that it could further criminalize non commercial copyright and trademark infringements, that it could reinforce Digital Rights Management (DRM) technologies at the cost of ‘fair use’ rights, that it could establish a dispute settlement procedure outside existing WTO structures and lastly that it could force all signatories to cover the cost of enforcement of copyright and trademark infringements.“.

Mere conduit is guaranteed by article 12 of the 2002 e-Commerce directive. This principle sets a special liability regime for network operators by which they have no legal liability for the data transmitted via their networks

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As made clear here, many policy-makers’ approach to filesharing is characterized by a dangerous confusion between counterfeiting and piracy

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Such a threat is still pending: the communication refers to legislation by warning that “the Commission will carefully monitor the development and functioning of voluntary arrangements and remains ready to consider alternative approaches, if needed in the future” (p. 10).

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“Safe-harbours” refer to the “mere conduit” principle.

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According to the Parliament: “the Commission should take into account certain strong criticism of ACTA in its ongoing negotiations, namely that it could allow trademark and copyright holders to intrude on the privacy of alleged infringers without due legal process, that it could further criminalize non commercial copyright and trademark infringements, that it could reinforce Digital Rights Management (DRM) technologies at the cost of ‘fair use’ rights, that it could establish a dispute settlement procedure outside existing WTO structures and lastly that it could force all signatories to cover the cost of enforcement of copyright and trademark infringements.“